Debt

Credit Facilities

As a source of short-term financing, we have a $2.5 billion revolving credit facility (“Credit Facility”), domestic and international uncommitted credit lines and we can issue up to $2 billion of commercial paper. In July 2015, we extended the term of our Credit Facility to July 31, 2020. The uncommitted credit lines aggregate $1.2 billion and $937.8 million at December 31, 2015 and 2014, respectively. There were no outstanding commercial paper issuances or borrowings under the Credit Facility or the uncommitted credit lines at December 31, 2015 and 2014.

Available and unused credit lines at December 31, 2015 and 2014 were (in millions):



	2015		2014
Credit Facility	$	2,500.0	$	2,500.0
Uncommitted credit lines	1,157.7		937.8
Available and unused credit lines	$	3,657.7	$	3,437.8

The Credit Facility contains financial covenants that require us to maintain a Leverage Ratio of consolidated indebtedness to consolidated EBITDA of no more than 3 times for the most recently ended 12-month period (EBITDA is defined as earnings before interest, taxes, depreciation and amortization) and an Interest Coverage Ratio of consolidated EBITDA to interest expense of at least 5 times for the most recently ended 12-month period. At December 31, 2015, we were in compliance with these covenants as our Leverage Ratio was 2.1 times and our Interest Coverage Ratio was 12.2 times. The Credit Facility does not limit our ability to declare or pay dividends or repurchase our common stock.

Short-Term Debt

Short-term debt at December 31, 2015 and 2014, of $5.2 million and $7.2 million, respectively, represents bank overdrafts of our international subsidiaries. Due to the short-term nature of this debt, carrying value approximates fair value. At December 31, 2015 and 2014, the weighted average interest rate on this debt was 3.7% and 6.0%, respectively.

Long-Term Debt

Long-term debt at December 31, 2015 and 2014 was (in millions):



	2015			2014
5.9% Senior Notes due 2016	$	1,000.0		$	1,000.0
6.25% Senior Notes due 2019	500.0			500.0
4.45% Senior Notes due 2020	1,000.0			1,000.0
3.625% Senior Notes due 2022	1,250.0			1,250.0
3.65% Senior Notes due 2024	750.0			750.0
Other debt	0.3			0.5
	4,500.3			4,500.5
Unamortized premium (discount) on senior notes, net	10.1			11.1
Debt issuance costs	(16.9		)	(20.5		)
Adjustment to carrying value for interest rate swaps	72.1			51.4
	4,565.6			4,542.5
Current portion	(1,001.4		)	(0.4		)
Long-term debt	$	3,564.2		$	4,542.1

The contractual maturities of our long-term debt at December 31, 2015 are (in millions):



2016	$	1,000.3
2017	—
2018	—
2019	500.0
2020	1,000.0
Thereafter	2,000.0
	$	4,500.3

Omnicom and its wholly owned finance subsidiary Omnicom Capital Inc. (“OCI”) are co-obligors under all the senior notes. The senior notes are a joint and several liability of us and OCI and we unconditionally guarantee OCI’s obligations with respect to the senior notes. OCI provides funding for our operations by incurring debt and lending the proceeds to our operating subsidiaries. OCI’s assets consist of cash and cash equivalents and intercompany loans made to our operating subsidiaries and the related interest receivable. There are no restrictions on the ability of OCI or us to obtain funds from our subsidiaries through dividends, loans or advances. Our senior notes are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness.

On March 26, 2015, in connection with the maturity of our 5.9% Senior Notes on April 15, 2016 (“2016 Notes”), we entered into a $1.0 billion forward-starting interest rate swap. The swap mitigates the risk of changes in the semi-annual interest payments from inception to May 2, 2016, the contractual termination date, and is designated as a cash flow hedge. The swap effectively locks in the fixed interest rate, excluding the effect of our credit spread, on any refinancing at 2.32%. The swap is carried at fair value and any net gain or loss is recorded in accumulated other comprehensive income. Upon settlement of the swap, any gain or loss on the effective portion of the swap will be amortized to interest expense over the term of the new debt or will be recorded in results of operations if the refinancing is not completed. At December 31, 2015, we recorded a liability of $5.6 million, which is included in other current liabilities and the related loss of $3.3 million, net of income taxes, is recorded in accumulated other comprehensive income, and almost no hedge ineffectiveness is recorded. The 2016 Notes are classified as current.

In May 2014, we entered into a fixed-to-floating interest rate swap on the $1.25 billion principal amount of the 3.625% Senior Notes due 2022 (“2022 Notes”). In September 2014 we entered into a fixed-to-floating interest rate swap on the $1 billion principal amount of the 4.45 % Senior Notes due 2020 (“2020 Notes”).

In October 2015, we terminated the swap on the 2020 Notes and realized a gain of $36.9 million and we reduced the notional amount of the swap on the 2022 Notes to $1.0 billion and realized a gain of $13.5 million. The gains will be amortized to interest expense over the remaining term of the notes. Additionally, in October 2015, we entered into a fixed-to-floating interest rate swap on the $750 million principal amount of the 3.65% Senior Notes due 2024 (“2024 Notes”). The swaps hedge the risk of changes in fair value of the notes attributable to changes in the benchmark LIBOR interest rate. We receive fixed interest rate payments equal to the coupon interest rate on the notes and pay a variable interest rate equal to three month LIBOR, plus a spread of 1.05% on the 2022 Notes and a spread of 1.72% on the 2024 Notes. The swaps qualify and are designated as fair value hedges on the 2022 Notes and 2024 Notes and have the economic effect of converting the notes from fixed rate obligations to floating rate obligations. Gains and losses attributed to changes in the fair value of the swaps substantially offset changes in the fair value of the notes attributed to changes in the benchmark interest rate. The net interest settlement is recorded in interest expense. At December 31, 2015, we recorded a receivable of $32.2 million, which is included in other assets, on the swap on the 2022 Notes and a liability of $10.0 million, which is included in long-term liabilities, on the swap of the 2024 Notes. At December 31, 2014 we recorded a receivable of $42.7 million, which is included in other assets, on the swaps on the 2020 Notes and the 2022 Notes. The receivable and liability represent the fair value of the swaps that is substantially offset by the change in the carrying value of the notes reflecting the change in fair value of the notes. Accordingly, any hedge ineffectiveness was not material to our results of operations. On January 19, 2016, we terminated the remaining $1.0 billion notional amount of the swap on the 2022 Notes.

Convertible Debt

There was no convertible debt outstanding at December 31, 2015 and 2014.

On July 31, 2014, we redeemed the outstanding Convertible Notes due July 31, 2032 ("2032 Notes") for $252.7 million in cash. Prior to redemption, the noteholders converted their notes into 1,217,112 shares of our common stock. On June 17, 2013, we redeemed the outstanding Convertible Notes due 2033 (“2033 Notes”) and the Convertible Notes due 2038 (“2038 Notes”) for $406.1 million in cash. Prior to redemption, the noteholders converted their notes into 1,499,792 shares of our common stock.

Interest Expense

Interest expense for the three years ended December 31, 2015 is composed of (in millions):



	2015			2014			2013
Long-term debt	$	210.2		$	192.7		$	182.0
Interest rate swaps	(53.3		)	(37.7		)	(7.3		)
Commercial paper	4.8			2.9			1.7
Fees	5.7			6.2			6.5
Other	13.7			13.1			14.3
	$	181.1		$	177.2		$	197.2